Bearish reversal?S&P500 (US500) is rising towards the pivot which is a pullback resistance and could reverse to the pullback support.
Pivot: 5,684.31
1st Support: 5,508.29
1st Resistance: 5,768.80
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SPXM trade ideas
Stock Market Dives into Correction? It Happens—Here's What to DoYou wake up, check your portfolio, and see a sea of red. The market’s down, your stocks are taking a nosedive, and CNBC is running apocalyptic headlines about an impending crash. Sounds familiar?
It’s maybe because we’re in (or super close to) a correction right now — the S&P 500 SP:SPX was down 10% from its record high two weeks ago and a lot of people are unsure what to do.
The truth of the matter is, stock market corrections are routine—not as often as the meeting that should’ve been an email, but also not as rare as a winning trade in the Japanese yen ( widow maker is real, yo ).
And, most importantly, they’re usually not as catastrophic as they feel in the moment.
So, before you hit the panic button (or worse, start revenge trading to “win it all back”), let’s talk about what’s shaking the market right now and how to navigate corrections like a pro.
🤔 First Things First: What’s a Correction?
A stock market correction is a drop of 10% or more from a recent high. It’s not a crash, it’s not the end of capitalism, and it’s definitely not a sign that you should liquidate your entire portfolio and move to a remote cabin in the woods.
Corrections happen regularly, typically once every year or two. They’re a natural part of market cycles, shaking out excessive speculation and resetting valuations to more reasonable levels.
For the record, a drop of 20% is considered a bear market.
🤝 Why the Market’s Getting Jittery
Markets don’t move in straight lines, and sometimes they hit turbulence. Lately, two big themes have been dominating headlines:
Trump’s Hard-Line Tariffs Hit Hard (And Markets Are Nervous About It)
If there’s anything Trump knows how to do is say things online or on-site and move markets. And his hostile and straight up combatant approach to handling international relations has sent traders scrambling to offload risk.
With hiked tariffs on China, Europe, and Mexico and Canada, businesses are bracing for severe supply chain disruptions, higher costs, and tighter margins. When tariffs go up, corporate earnings tend to go down—and the market doesn’t like that math.
Inflation Just Won’t Quit
The Federal Reserve spent most of the last two years trying to tame inflation, and just when it seemed like things were cooling off, it’s creeping back up. The latest readout of the personal consumption expenditures (PCE) report showed prices ticked up more than expected at 2.8% in February.
Higher inflation means the Fed might keep interest rates elevated for longer than expected, making borrowing more expensive and slowing down growth. Every new inflation release has investors guessing: Will the Fed cut rates, hold steady, or—worst case—hike again?
Between trade wars and stubborn inflation, uncertainty is running high, and that dynamics breeds volatility. But a correction doesn’t mean the market is broken—it just means sentiment has shifted.
⚠️ How NOT to React (aka: Rookie Mistakes to Avoid)
When corrections hit, bad decision-making is at an all-time high. Here’s what not to do:
Panic selling – Selling at the bottom is a classic rookie move. If you weren’t planning to sell at the highs, why dump everything when it’s down?
Trying to time the exact bottom – Good luck. Nobody, not even Warren Buffett, can catch the bottom (not that he’s trying). If you’re waiting for the “perfect” dip, you’ll likely miss the rebound.
Going all-in on one asset – Thinking of putting everything into one stock or crypto because it’s “cheap” now? Please don’t. Diversification exists for a reason .
Getting glued to financial news – Watching every market update during a correction is like doom-scrolling Google after a mild headache—you’ll only freak yourself out more.
Now that we’ve covered what not to do, let’s focus on the smart plays.
💪 So, What Should You Do?
If you want to come out of a correction with your sanity (and portfolio) intact, here’s your game plan:
1️⃣ Zoom Out—Corrections Are Temporary
The market moves in cycles, and corrections are just part of the game. Historically, corrections last a few months, while bull markets last years. If you’re investing for the long term, a correction is a blip on the chart, not an extinction event.
2️⃣ Review Your Portfolio Like a Hedge Fund Manager
Corrections are a great excuse to audit your holdings. Ask yourself:
Is this stock/ETF/index still worth holding?
Has anything fundamentally changed, or is this just temporary market noise?
Do I have too much exposure to one sector?
Think of it as spring cleaning for your investments. It's also an opportunity to make some good use of the handy Stock Screener or Stock Heatmap to spot the best (and worst) performers. If something was a FOMO buy and doesn’t belong in your portfolio, consider trimming it.
3️⃣ Buy Selectively, Not Blindly
Corrections create opportunities, but that doesn’t mean you should just throw money at every stock that’s down. Some companies deserve their declines ( looking at you, Nikola )—others are just collateral damage in a broader selloff.
Look for quality companies with strong earnings, manageable debt, and real growth potential. If they were solid before the correction, they’ll likely recover faster than the overhyped names.
Example: Remember when Amazon stock NASDAQ:AMZN tanked 90% in 2000, the dot-com bubble? No, because you were too busy being 2 years old instead of loading up on Jeff Bezos’s dream. And look where the guy’s now.
4️⃣ Do Some Good Old DCA
Instead of dumping all your cash into the market at once, use dollar-cost averaging (DCA). Buying in small increments at regular intervals helps you avoid the stress of trying to time the bottom. If prices drop further, you can buy more at an even better price.
5️⃣ Keep Emotions in Check
Corrections test your patience and discipline. The best investors don’t let fear dictate their strategy. If you’re getting emotional about your trades, step away from the screen and take a breath. The market will be there when you come back.
👍 The Market Always Bounces Back—Eventually
Every correction feels like the worst one while it’s happening. But let’s look at history:
The S&P 500 has faced 30+ corrections since 1950. It survived them all.
The average correction lasts four months before a recovery begins.
After a correction, markets typically rally higher within a year.
Unless you believe the global economy is permanently broken (hint: not yet, at least), every major downturn has eventually turned into a new bull run.
🦸♂ Final Thought: Be the Hero, Not the Victim
Market corrections separate the professionals from the wannabes. The people who panic and sell at the bottom? They usually regret it. The ones who keep a level head, stick to their strategy, and take advantage of good opportunities? They come out stronger.
And finally, if you need to take away one thing it’s this: Corrections aren’t the enemy. They’re the price of admission for long-term gains.
👉 Let’s hear it from you!
How do you handle corrections, what’s your strategy when the market is in a downturn and what’s in your portfolio then? Share your experience in the comment section!
SPX - Melt up & Crash series [3]Blue parallel channel held perfectly while many were bearish!
Now has a date with the top rail, maybe at 2.618 intersection who knows...
Expanding megaphone (green) had false breakdown, if it breaks back in and upwards = huge bullish move.
So much room on the RSI to run with huge positive divergence.
Not financial advice.
Amazes me how long these patterns take to form, for them to be concrete and actionable. Hopefully this series is the last one I post. Realistically just waiting for this low to be set. Think this could be it.
S&P 500 Wave Analysis – 1 April 2025
- S&P 500 reversed from support area
- Likely to rise to resistance level 5700.00
S&P 500 index recently reversed from the support area located between the support level 5500.00 (low of the previous wave (A)), lower daily Bollinger Band and the 61.8% Fibonacci correction of the uptrend from August.
The downward reversal from this support area stopped the earlier short-term impulse wave 1 of the downward impulse sequence (C) from the end of March.
Given the improving sentiment across the equity markets and the strength of the support level 5500.00, S&P 500 index can be expected to rise to the next resistance level 5700.00.
S&P500 Last time it made that bottom was 18 months ago.S&P500 / US500 is trading inside a multi year Channel Up that goes back to October 2022.
The index almost hit the Channel bottom this week and immediately we see a rebound attempt.
It may be under the 1week MA50 but this is not disastrous as the patterns last bottom was formed exactly under it on October 23rd 2023, 18 months ago.
On top of that, the 1week RSI was exactly where it is now, on the 40.00 Support, bearish enough to call for a long term buy.
In addition, the both bearish waved leading to both bottoms were almost -11%. This high symmetry potential suggests that the bullish wave that will follow may be of a similar +28.34% rise.
This is a unique opportunity to buy and target 7000.
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S&P 500 Trading at Long-Term Channel HighThe S&P 500 is currently trading near the upper boundary of its long-term price channel, both from the 1930s and the 2009 rally. This positioning raises the question: Is the S&P 500 vulnerable at its current level?
Trading near the upper channel often indicates potential resistance, suggesting that upward momentum may face challenges.
I spy an Evening Star Doji on SPXso alot is going on. when we gapped up and ran nonstop 3/25-3/26, i decided to look for reversal signals. tues was a tight range. it formed a doji; which was suspect. the move below the open print today was the second. and now i see we are up on a tweet and a prayer. this 3 candlestick pattern confirms that. however... the higher timeframes are in a wide range. so, if we reverse the bearish candlestick >5720 i believe we can retrace a bit... maybe revisit the sell fell off area.
***to invalidate the sell trigger, we need to bet above the doji.
***if we do keep rocking and rolling... note this area. it is an unfilled gap as of now. if it gaps down, wait to see how 1st 15-30mins react. looks like ES-emini gapped down a bit. that may be it, but this is an A+ set up for a trip back to take out short term lows at least. tootles!
For more on the pattern... I love the breakdown/visual provided here:
alchemymarkets.com
1 April 25 - Double Bottom of forming Double Top Bear Flag
Yesterday's candlestick closed as a big bull bar in its upper half with a long tail below. The market gapped down and traded below the March 13 low but lacked follow-through selling.
The bulls see the current move as a retest of the prior extreme low (Mar 13).
They want the market to reverse from a lower low major trend reversal pattern.
At the very least, they want the market to form a larger 2-legged sideways to up pullback testing the 20-day EMA or the Mar 25 high.
They must create follow-through buying today to increase the odds of higher prices.
The bears got a retest of the Mar 13 low and saw yesterday simply as a pullback.
They want the pullback to form a lower high to Mar 25 high, forming a larger double top bear flag.
They want the 20-day EMA or the bear trend line to act as resistance.
Today, traders will see if the bulls can create follow-through buying. If they can, the market may trade a little higher towards the Mar 25 high area.
After a big move yesterday, the odds of a couple of hours of sideways trading early in the day increase.
S&P INTRADAY awaits tariffs clarity capped by 5711Resistance Level 1: 5711
Resistance Level 2: 5788
Resistance Level 3: 5863
Support Level 1: 5487
Support Level 2: 5412
Support Level 3: 5262
This communication is for informational purposes only and should not be viewed as any form of recommendation as to a particular course of action or as investment advice. It is not intended as an offer or solicitation for the purchase or sale of any financial instrument or as an official confirmation of any transaction. Opinions, estimates and assumptions expressed herein are made as of the date of this communication and are subject to change without notice. This communication has been prepared based upon information, including market prices, data and other information, believed to be reliable; however, Trade Nation does not warrant its completeness or accuracy. All market prices and market data contained in or attached to this communication are indicative and subject to change without notice.
Don’t Let a Green Candle Fool YouDon’t Let a Green Candle Fool You | SPX Analysis 01 April 2025
We got the “boing” – but not the bounce that changes anything meaningful.
Monday opened like a trap door - gap down, quick poke near 5500, and then a full day of rallying that had CNBC anchors high-fiving like they just called the bottom of the century.
Except… they didn’t.
We’ve seen this act before. One-day rallies that puff up like a balloon, then vanish. And just like before, I’m not chasing a single green candle or headline optimism. I’m not a bull until 5700 is reclaimed - simple as that. That’s the bear flag failure point, the GEX pivot, and my personal line in the sand.
So while the crowd celebrates a maybe-double-bottom, I’m keeping my slippers firmly on the bear side of the wardrobe. And if Monday proved anything, it’s this…
Sometimes, the trades you forget about end up being the ones that pay.
This Bounce Doesn’t Fool Me – Here's Why I’m Still Short
Let’s call it what it is: a rally inside a bearish structure. Until we break the top of that structure, it’s just noise.
Here’s what really matters:
Monday gapped down, dropped toward 5500, and then staged a rally.
Everyone’s calling “double bottom!” - but I’ve seen more convincing bottoms on a bowling ball.
These reversal days have been common lately – I counted five in the last six weeks.
We’re still under 5700, which is the GEX flip, the flag failure, and the bullish invalidation.
That means I’m still riding:
Bear Swing #1 – opened last week, still on.
New aggressive shorts – 10-min bearish Tag ‘n Turn below 5500 only.
Bonus: A Forgotten Trade Hit Target on Monday
You’ll love this.
I had a bearish swing from around 20 March. Honestly, I forgot about it. Wrote it off. It was gathering dust in the corner of my options book.
Then, boom – Monday open… "Order Filled".
Target hit. Gap did the job. Payout in the pocket.
It’s a reminder every trader needs:
“It ain’t over until expiration… and sometimes not even then.”
GEX Analysis Update
Whole and half numbers acting as support and resistance
Expert Insights: Avoid These Rookie Mistakes
❌ Mistake #1: Getting Sucked Into Green Candles
Just because the market bounced doesn’t mean it’s time to flip bull. Watch the levels, not your feelings.
❌ Mistake #2: Cancelling Too Early
The Trade’s Not Over Just Because You’re Bored
Most traders kill good trades because they get impatient.
They cancel too soon. They “manage the trade” to death. Or worse, they chase a green candle and flip bias on a whim.
Here’s what Monday reminded us:
✅ Let the trade breathe.
That bear swing from 20 March? Forgotten. Ignored. Hit target anyway.
✅ Stick to your plan, not your mood.
The market rallied. But did it change the structure? No. Still below 5700. Still bearish bias.
✅ A good trade doesn’t need your babysitting.
Set the rules. Place the trade. Walk away. Check back later with a smile.
The traders who win are the ones who stop trying to outsmart their own system.
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Fun Fact
In 1999, a 15-year-old stock trader named Jonathan Lebed made over $800,000 pumping penny stocks from his bedroom... before the SEC came knocking.
Moral of the story? Markets will always reward confidence, consistency, and a little bit of cunning – but it’s the trader who sticks to a rule-based system who lasts beyond the headlines.
SPX next 5 years outlookIn this chart I show my SPX long term view from covid recovery to about 2030.
SPX is moving in a big rising wedge, I think that on the long term prospective we're still in the 3rd bullish wave targeting 6440 area. From there I see a retracement (4th wave) to 4800 area before last bullish 5th wave to 7400 area.
From 7440 I see a sharp bearish retracement , the breaking of rising wedge will lead spx to target 4200 area.
On the medium term I think that we've to test 3320 area before targeting 6440 (completion of 3rd wave), but on the short term I see a retracement to retest 6000 area before dump to 3320.